Tesla issued $920 million of convertible bonds that give holders the option to convert those instruments for Tesla stock at $360 a share on March 1, 2019. If the stock is trading below that level, Tesla may have to repay that $920 million.

Musk's "funding secured" tweet got Tesla's stock above the critical threshold, but the subsequent fallout has sent the stock even lower than before the announcement — now to $260.

Elon Musk sent shockwaves through the financial world in August when he flirted with taking Tesla private at $420 a share.

Now, with that effort having passed, the focus is shifting back to the company's fundamentals and Musk's performance as CEO, the Model 3, and a $360 stock-price trigger on $920 million in convertible bonds.

Back to the fundamentals

For a brief period during Musk's bid to take the company private, a move designed to avoid the scrutiny and disclosures that come with being a public company, the car company's stock soared. It was cents from setting a record high following the billionaire's proclamation that funding for a buyout was "secured."

Nearly a month later, with Musk having reversed course and with it clear that funding had been anything but secure, Musk's antics have left investors unhappy and Wall Street analysts scratching their heads. The company is facing an investigation by the Securities and Exchange Commission, numerous investor lawsuits, and numerous high-profile departures.

"He's lost a lot of confidence in some of his core investment community, and that's what we're seeing in the stock right now," Ross Gerber, whose firm, Gerber Kawasaki, owns roughly $10.5 million worth of Tesla stock, told Business Insider. "He doesn't seem to want to build any confidence or care.

"Elon seems to be falling on his own sword right now, for whatever reason," he continued. "There's no reason why the stock shouldn't be at $360 today. The only reason it's not is because of Elon."

The concern over Tesla's prospects can also be seen in the bond market. Credit-default swaps, a measure of how much traders are paying to protect against a bond default, have surged 25% in less than a month to $609, near a record high. The swaps' underlying bonds, on the other hand, plunged to a record-low $85.79 on Wednesday.

It's all about the Model 3

The ramp-up of Tesla's Model 3 sedan production is crucial to the company's success, says Rusch, who has a $385 price target for the stock. By the company's estimates, producing 350,000 total vehicles a year "should enable Tesla to become sustainably profitable for the first time," it said on August 1. The company produced 53,339 vehicles in the three months that ended June 30, its most recent update on total deliveries.

"We believe ... concerns will be at least partially allayed if Tesla successfully generates cash from its Model 3 production," Oppenheimer said in a recent note. "We believe if TSLA reaches its Model 3 guidance, it will generate positive operating cash flow."

But even with an infusion of at least $49,000 in cash for each Model 3 Tesla delivers off its recently upgraded production line in Fremont, California, some analysts are worried Tesla could still find itself needing to tap capital markets for a cash infusion before it reaches profitability.

"Model 3 production/deliveries could drive positive free cash flow (FCF) in 2H18, but we believe this will likely not be sustained as working capital tailwinds abate and as spending ramps back up after a period of cash conservation," David Tamberrino, an analyst at Goldman Sachs, said this week.

Tamberrino, who has a $210 price target for the stock, is also worried about demand drying up as Tesla loses an electric-vehicle subsidy from the US government that it used as a selling point for years.

"We believe this could lead to a more challenging demand environment and ultimately profitability trajectory for Tesla especially as the new models are launching across vehicle segments and price points — while Tesla has a slower launch cadence planned," Tamberrino said. "We believe the higher price point buyers for the Model 3 could be exhausted for Tesla by year-end."

Complex convertibles

Tesla issued $920 million of convertible bonds that give holders the option to convert those instruments for Tesla stock at $360 a share on March 1, 2019. If the stock is trading below that level, Tesla may have to repay that $920 million.

With just $2.24 billion in cash (or cash equivalents) on hand, that's money that Tesla can seemingly ill afford. If push comes to shove, Musk could have to do what he pledged not to and return to raising money.

"With looming maturities on convertible debt, we believe the company would likely need to come back to the capital markets in 1H19," Tamberrino said.

Returning to the convertible-bond markets could attract the attention of one group Musk seems to hate above all others: short-sellers. Issuing more convertible debt "drives more short sellers to your stock," the Cowen analyst Jeff Osborne said last week, according to Reuters. "And Musk does not want that."

It's common for investors in convertible bonds to hedge their positions through short-selling, or betting against the underlying stock. Musk has railed against this practice, telling The New York Times in August that he was gearing up for "months of extreme torture" from them. "These guys want us to die so bad they can taste it," he tweeted back in 2017.

Reached for comment, a Tesla representative referred to comments in Tesla's second-quarter letter to shareholders.

"We still expect to achieve GAAP profitability in Q3 and Q4. Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace," it says. "We expect to generate positive cash including operating cash flows and capital expenditures, as well as the normal inflow of cash received from non-recourse financing activities on leased vehicles and solar products."